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Leasing a truck

Discussion in 'Trucks and Trailers' started by Esby, Jul 26, 2001.

  1. Esby

    Esby LawnSite Senior Member
    Messages: 662

    To do or not to do??? I am looking at leasing a new Chevy 1500. Do you have any experience with the whole lease idea, because I am new to it. I have only boughten my vehicles prior to this.
  2. Bob_McNaughton

    Bob_McNaughton LawnSite Member
    Messages: 94

    I've leased around 4 vehicles in my life so far, and have bought closer to 10. Depends on your circumstances which is better for you.

    Nearly 80% of all new vechiles sold are leased today.. 15 years ago, only 10-15% were leased..

    Leasing is mileage restricted, and is usually better for the city driver, or for your spare vehicle. Lease payments are much lower than purchasing, but you have no equity in the vehicle at least end. So basically, you pay alot over 2-3 years, and have nothing to show for it at the end of the 3 years! Keep in mind, the vechile condition at lease-end is critical. If you wear it out, they WILL nickle/dime you to death with added expenses.

    Buying is still the best bet. Your payments will be higher, but you have equity in the vehicle when you decide to sell it. (hopefully). So buy a vehicle for 5-6 years, and when you are done paying it off in 5 years, you have a truck worth 3-4k! (trucks hold value like crazy, even junk trucks sell for 2k).

    The reason leasing is so popular is because people that want a 30-40k vehicle cannot afford to buy them. So they end up leasing, and saving 100-200$ a month in payments. It is not a smart thing to do, but the only option for people that want a fancy new car and can't afford it.

    Leasing is a good write off for the business owner (100%), but keep in mind, it may end up costing you more if you go over the miles, or use it for commercial. Talk to your accountant. Sometimes it is better for you to personally buy the truck, then lease it to your company taking the full write-off on the company, and making a few bucks on the personal side.

    Hope this helps.
  3. cat320

    cat320 LawnSite Senior Member
    Messages: 823

    A lease is only good if you want to have a full service type and not worrie about any thing.Other than that you pay thru the nose I think and really get nothing in return but paymebnts any you never get to own it.when you bring it back they get you for every nick and scratch tires and it all comes off your security plus millage too.But for a 1/2 ton I would not bother they are cheap enough then you own it.We have found it bad to lease unless you only need it short term. Do the math before you lease.

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Messages: 665

    They are harder to find, but you could assume a lease. That is what I did. I got a 1998 Chevy HD 3/4 ton 4x4 w/ a meyer poly plow. Like new in & out. 31,000 miles. They put the $2500 down, they paid for the plow.I pay $320/mo and can buy it in a year1/2
    for 13,000. I went around and around the issue for 2 years. New ones were $600.00/mo. Guess I got lucky, but you could do a nationwide search. Find one that will work. Fly out, drive back.
  5. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    Suprising comments so far....

    Financial advisers will always tell you to lease your vechiles and buy your homes.

    Vehicles depreciate in value as homes will apreciate in value. Buying a vehicle IMHO will later cost you in repairs. Leasing provides worry free.

    Turned in trucks before...Dealer looked at the trucks from a far. Then put me in a new one that day. No cost to me ...just started making payments. I do have a great dealer.

    Owned one vehicle before (never again)...later in its age the "equity" that I put into it was my own money from the costs of repairs near its selling days. Then the hassle to sell it was not worth it at all

    I will never again own a vehicle unless I can pay cash upfront.

    As said before lease payments are deductible.
  6. racerdave

    racerdave LawnSite Senior Member
    Messages: 260

    Someone mentioned this a few weeks ago and it struck me like a ton of bricks. I don't rmember who brought it up, but they went further with also buying their mowing equipment and leasing it to their Biz. Their main motive was to protect the equipment from liability issues(being sued). And making an extra buck.

    I think in our biz a truck is worn out in about 5/6 years. Then they start nickel and diming you to death. You will notice most corp. will keep their trucks for a predetermined amount of time figuring wear and tear and depreciation.

  7. CCLC

    CCLC LawnSite Senior Member
    Messages: 261

    Has anyone Leased a GM 3500 HD or a W-4 truck? I have kicked the idea around and am looking into it. I would like any feedback to give me some insight to this.

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Messages: 665

    I almost leased a new 3/4 ton 4x4 w/plow. Really pretty stripped down. Sticker was $25,000 (Ford super duty) The lease price was $660.00 a month!!! That was no $$ down. The reason- commercial lease. These people have no mercy when you tell them it is for a business.
    And as far as a write off, well, it is 100% deductible, but that payment is still $$$ out of your pocket every month. For the guys showing a fairly low dollar at the end of your schedule C, you only really are saving 15% of every dollar you spend on the payment, so it still doesn't make sense to go ahead and get a huge monthly payment.
  9. dhicks

    dhicks Member
    Messages: 770

    If you are in business for yourself, leased vehicles and equipment are the way to go. I look at it this way for example, if I buy a new truck for my company, the accountant will depreciate the truck on a sliding scale. While I'm in a 33% tax bracket, I can only recover in taxes $667.00 for every thousand dollars in depreciation claimed for the year. Are you with me?

    Now, If I lease and say my payment is $500.00 per month x 12 months I can take the entire deduction from my taxes or $6,000.00.

    I have leased my new trucks since 1996. Trucks get beat up, scratches and bumps, knicks and whatever else. Because I buy the same kind of truck every three years, my dealer has never charged me for extra mileage or damage. Whoever said trucks have great resale value is positively correct. The residual value of the truck is almost always more thus no nickel and dime for damage and extra wear and tear.

    Check will your tax person so that you can make the decision that is right for you..

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